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Oddworld: Spending $30m on games, not Ferraris and private jets

Oddworld: Spending $30m on games, not Ferraris and private jets

Mon 01 Oct 2012 11:45am GMT / 7:45am EDT / 4:45am PDT
PublishingDevelopment

After telling Electronic Arts "f**k you", Lorne Lanning is back building games as his own micro-publisher

What did Lorne Lanning say to Electronic Arts when it wanted to acquire his studio, Oddworld Inhabitants?

"Fuck you very much."

And with that, he left the games business.

Now Lorne Lanning is finally doing what he intended all along - to make games for the fans. That hasn't been easy in a past where a much-loved franchise was hampered by the demands of the games business. Lanning is still wound up about that, still wound up by the terrible business practices that never worked in favour of the developer. The business practices that squeezed the most amount of work out of a developer for the least amount of rewards. Less than a console generation ago publishers were driving the sports cars while developers were eating out of bean tins.

"You won't be seeing our profit being spent on Ferraris and shit like that. Our profits are going back into games"

"Our agreement is, you won't be seeing our profit being spent on Ferraris and shit like that," Lanning tells GamesIndustry International. "Our profits are going back into games so we can ultimately raise to the point where we can grow our audience, who are expecting new content."

So Lanning is back promoting a collection of Oddworld games that have been given the polish, remake and HD treatment alongside partner Stewart Gilray and his guys at Just Add Water. Lanning likes this team so much he refers to them as "Oddworld UK" which must please Gilray, a fan of the Oddworld games since day one.

Those releases are already performing well, with Gilray revealing that the PC and HD PlayStation 3 versions of Oddworld: Stranger's Wrath have already passed a quarter of a million sales. This is a title originally released on Xbox in 2005 that sold 600,000 units. With that original release Lanning was vocally disappointed at the lack of support from publisher EA. But Lanning's plan for his franchise and company spells out a much more interesting future than it faced seven years ago.

"On the micro-publisher level it's very simple. We fund our own products," he says. "We weren't able to do that in the boxed product days, we're only able to do that in the digital distribution landscape.

"Rather than having to have 1.5 million units in the opening week or suffer death, now if we have 50,000 sales and we're still in business. People are still employed and we're able to keep making content. When we released box product we would get 20 per cent of the revenue. After that 20 per cent paid back the entire development budget, if it was still selling at $60 we would start seeing $7 a unit. Because of the bricks and mortar, the plastic, the manufacturing, the gas involved in taking games to the store, the store itself and all those extra costs - not one of those costs makes a better game for the player."

"If you're the gamer, where do you want the money of the game you're buying to go?" he asks. "I want it going to help make more games. But the majority of that money is not going to games in the boxed product market.

He continues: "Now we're on a digitally distributed landscape, instead of a $60 price point we can offer a $9.99 price point. At $9.99 we get $7 per unit. At this price you're getting a game for one sixth of the price and we're still getting money to make more games. The player is truly funding our games. We have a few hundred thousand people we can depend on as fans of Oddworld who will buy our games. If we can get that number up to 3-5 million and with the increase of what that brings to the developer, then we can start funding our own $20 - $30 million triple-A games. That's our goal."

"How do we not get in bed with the IMF? Publishers are flying jets, do you think they care about the customers just one fucking percent? Not at all"

$30 million triple-A digitally delivered video games won't happen in the near future, and can't happen on the current generation of consoles. Not built by an indie, at least. And Lanning is honest when he says part of his current re-releases are not only down to the love of the games, but also testing the market. Besides, Oddworld Inhabitants doesn't have tens of millions of dollars in the bank to fund new projects just yet.

"There's truth in what we can afford at this time without having to cut the baby in half. Without having to bring in partners that want a piece of the baby," he says.

"Right now it's 100 per cent ours. We're testing those waters and every time it's proving successful. And then with JAW, everything they've done is true to the brand. With Abe's Odyssey they wanted to make it better. With Stranger's Wrath HD that was a bigger bet. Financially it was a bigger bet and it paid off. All that money now has gone back into new titles."

Lanning is clearly enjoying being back in the games business again, with digital distribution the springboard for his return. But it was also the learning experiences from his bitter partnership with EA that inspired full independence for Oddworld Inhabitants.

The original Stranger's Wrath was planned for Xbox and the PlayStation 2, with Oddworld developing the version for Microsoft's console and EA intending to take care of the PlayStation version. But the PS2 version was cancelled during development, with Lanning still feeling this was the beginning of darker plan. EA withdrew marketing and promotional support for the game because it wasn't a multi-format title, and the game sank at retail, shifting 600,000 units "on a title that really needed to do 1.6 million to break even."

According to Lanning, with Oddworld Inhabitants losing money on the development of the project, EA wanted to step in to acquire the team.

"When you say that to us we go 'fuck you very much', quite frankly. That's not a sustainable model, that's a hostile acquisition," he says. "That's why we had to strive to get independent. Rather than get into bed with someone we knew was a horrible bed partner we said 'let's stay virgins for longer'.

"If we have a hope on this digital landscape we'll be able to go directly to our audience and learn more about them, more from them. Let's make a really intelligent re-entry into the market place and show that games to people who didn't get exposed to them. And then if that's successful we'll have the money to start building brand new stuff."

"Whether it succeeds or not, it will not have been a pound of flesh that hurts so bad it's going to make our future products suffer"

Lanning on PS Vita releases

So Oddworld is back and making some initially decent sales with the remakes, but there's still an element of gambling in the projects it takes on. There's one more version of Oddworld: Stranger's Wrath to come, due in November for the PlayStation Vita. While there's no doubts that the Vita hardware is attractive to developers, the system hasn't sold to expectations, and there's a chance that once again, a unique and original title like Stranger's Wrath will sit on a console that doesn't have any players.

"What I would say to Sony's credit is the way they've made getting on there so much easier than it was getting on the PlayStation 2 or PlayStation 3," offers Lanning. "We hope it succeeds but we don't need it to succeed. It's not do or die. They've helped us tremendously just by allowing PlayStation One classics on the PS3. I can't tell you how wonderful that's been because it's helping to pay for all of this.

"If we can help Sony, whether it succeeds or not, it will not have been a pound of flesh that hurts so bad it's going to make our future products suffer. If it finds a wider audience than people it didn't reach before then to us it's worth it."

The economics of the digital markets favour the developer so much more than they ever did in the past. When I first interviewed Lorne Lanning for GamesIndustry International over six years ago, he was a man who you could politely described as 'disillusioned', or more accurately, 'pissed off' with the business.

"Disillusioned or aware, I don't think there's much difference. There was no incentive to build great product. How many games developers that you know of are actually building products? The reason is all the incentives have been yanked away," he says.

"The only reason we're really able to get away with it and not be cogs in some enormous machine that does not care about us, is we're able to retain the ownership of the brand," says Lanning of his return to games. "We can blow that by treating the audience with disrespect. Or we can grow and nurture that even if it's just remaking the games we already have. With a great band you want their music but you don't give a shit who the record label is."

"We closed down Oddworld for a couple of years but I was spending a lot of money on flights to see Valve and picking the brains of the smartest guy in the business, Gabe Newell. Just trying to learn. If this is going to work as the games business going forward, how do we not get in bed with the IMF. That's your big publishing landscape. The owners are flying jets, do you think they care about the customers just one fucking per cent? Not at all."

Lanning's gone back to his day-one philosophy of games development and he's glad of it, because it's clear from looking at the triple-A landscape studios have been torn apart by bad deals they signed off in the past.

"Look at what happened to the guys at Infinity Ward. How many billions did that property make? How many lawyers did they have to pay to get their rightful millions?""

"What we care about is we wanted to create something that would mean something to us and we believed would appeal to the audience. And the only way to sustain that integrity was to drive our own ship and not have to depend on a partner who could do to us what happened to us. And we weren't alone.

"If you look at the deals that triple-A developers are in today, at the deal stage before you even know what titles are coming out from that studio, if it has great success the publisher has the clause to buy that company at the value before the success. If they have a failure the publisher has the ability to toss them to the curb. So there's no real winning solution. Just look at what happened to the guys at Infinity Ward. How many billions did that property make? How many lawyers did they have to pay to get their rightful millions?"

"If fans heard me vent and were just like "you're a pussy, you're a complainer". You know what, you don't know the half of it. I don't mean to be condescending to fans it's just true. The real dirty shit we can't talk about because there's laws and all-powerful leaders."

20 Comments

Anthony Gowland
Lead Designer

155 428 2.8
"Our agreement is, you won't be seeing our profit being spent on Ferrari's and shit like that, Our profits are going back into games"

So, no developer bonuses then?

Posted:A year ago

#1

Teut Weidemann
Consultant Online Games

50 18 0.4
So he accuses all of us to spend our well earned money on Ferraris? Who is he anyway? A$$tre

Posted:A year ago

#2

Scott Davis
Product Analyst

16 8 0.5
I'm glad to see Lorne Lanning back - he may be very outspoken and not have a good track record with running a business, but frak me can the man design a good game - rich, awesome, witty gameplay with so much depth! Looking forward to seeing the first original oddworld title to come after all the remakes.

Posted:A year ago

#3

Bruce Everiss
Marketing Consultant

1,716 598 0.3
Ferraris are over-rated these days.
Ubersaloons are far more useful. Brabus are where its at.

Posted:A year ago

#4

Alex O'Dwyer
Animator

162 155 1.0
I'm very excited at the prospect of more Oddworld

Posted:A year ago

#5

Tom Keresztes
Programmer

632 223 0.4
That is Odd.

Posted:A year ago

#6

Anthony Chan

83 68 0.8
I think Lanning's comments come off a bit coarse, but he does have good points. From a personal view, many of today's big publishers, started as small developers. They made great games which as players chime were "focused on the game, as opposed to the bottom line". Then came IPOs, mergers, and the goal of being the most influential in the industry (through size and trading volume as opposed to actual game IP quality); and now we have big company execs who are better businessmen than content creators with passion and vision.

Rinse wash, and we get "safe" games that cater to the financial statements more than to actual gamers. However, all that being said, there are not many investors who are willing to pour cash into something that may not ever have a cashflow beyond 6 months of sales.

Posted:A year ago

#7

Stewart Gilray
Managing Director

29 23 0.8
Popular Comment
We do pay bonuses, but we don't need to blackmail our staff by having them relying on LARGE bonuses, plus we treat our staff with respect and rarely, if at all ask them to work Overtime or crunch.

Unlike some places I could mention.

Posted:A year ago

#8

Stewart Gilray
Managing Director

29 23 0.8
Sorry, who are you, that you can make a statement like that?

So now that I've googled you, you worked on some of my favourite games of the 16bit days, so find it incredible you'd make statement like that, must have hit a nerve.

Edited 1 times. Last edit by Stewart Gilray on 1st October 2012 7:53pm

Posted:A year ago

#9

Tim Carter
Designer - Writer - Producer

538 224 0.4
@Anthony Chan: The reason why that dynamic occurred is because the focus was placed on the game studio and not the games - in other words, it wasn't project-based.

Any time games are treated as vehicles for studios - which is inevitable when you focus on game studio "start ups", instead of focussing on games themselves - the relentless motion will be toward the status quo. If you want to grow, you will eventually become public. If you stay private, you will stay the same throughout the life of your company. Either approach will inevitably stunt creativity.

Posted:A year ago

#10

Matt Jeffries
Senior Producer

14 18 1.3
Wasn't there an Oddworld movie at one stage? What happened to that?

Posted:A year ago

#11

Stewart Gilray
Managing Director

29 23 0.8
Lorne still plans on making it. There is pre-production Art and a script done, but he's waiting for the right conditions to do it.

Posted:A year ago

#12

David Amirian
Writer

59 3 0.1
its nice to live in a world where the temporary benefits to a consumer put the money more directly back into the games themselves. But the truth of the matter is, digital distribution is a license to play, they're not controlling their access to that game.

With pluses, come minuses. What is good for a developer/publisher is usually bad for a consumer. Digital distribution is bad for the consumer because eventually at some point in time that game that we spent 10 dollars on 10 years ago will no longer be available to us to download, while physical products would still stick around as long as it didn't implode in your hand -- but at least you have control over that.

It is nice that "auteur"-type developers such as Lanning get to have more control over what they do, so maybe in the end the positives from the "new model" will put us a step ahead even if we have to take a step back to get it.

Posted:A year ago

#13

Nick Parker
Consultant

264 124 0.5
It should be the aspiration of all developers to be craftsmen/women so we shouldn't squabble over being paid a fair wage for good work. What Lorne is saying is not new; I'd be a rich man if I received a dollar each time a developer put two fingers up at a publishers as he/she struck out for independence. In the UK, Peter Molyneux continuously yearns for an artists romantic lifestyle, sitting over his canvass, chain smoking in an untidy attic studio to the extent that he likes to publicise his divorces with publishers and masters in striking out for independence. Publishing is a necessary evil and the irony is that as developers become publishers on browser and mobile, they will have to balance creativity with profitability thereby facing the reality of having to cull their own ugly ducklings.

Posted:A year ago

#14

Stewart Gilray
Managing Director

29 23 0.8
I'm not sure that's entirely true...

Take the original Abe games on PS1, we are still selling those on PS3 & VITA and they're doing well. They're 15 years old now and still selling strong.

So in the grand scheme of things Digital is better, as once retail units are sold/gone, that's it no more will be manufactured, but with Digital, we sign a new distribution agreement, send them a digital file and it's done.

Posted:A year ago

#15

Nick McCrea
Gentleman

163 185 1.1
In addition, even physically owned software 'decays' over time to eventually become, if not unplayable, then extremely difficult / inconvenient to play for the average consumer, as the original context in which the software originally ran (OS, drivers, hardware) becomes obsolete. So the idea of owning physical copies 'forever', is not really entirely valid without some qualification.

Digital isn't perfect, but saying it's obviously worse for the *average* consumer isn't accurate, I think.

Posted:A year ago

#16
"private jets"

Are there developers out there using these? Wow - kudos.

Posted:A year ago

#17

Brian Coyle
Professional tutor

1 1 1.0
There is a freedom that comes with digital distribution and developers with great ideas, will be able to create those games , without being tied to a publisher and its goals. Having better security in your Job is a big plus, not watching all your hard earned work end up in someone else's pockets while you have to lay off or close down your studio should do the industry and morale at studios a big boost. I don't hate publishers but they had their time and place and that is changing, exciting times ahead with hopefully more innovation.

Posted:A year ago

#18
The need to be edgy and outspoken to gain attention of your company is a bit “odd” when it should be your titles talking the loudest. I certainly applaud his devotion to his fans and his ability to shun the allure of big publisher money. I think most of us in development dream of having the creative freedom to make the games we and or the fans desire. Although that title could become beautiful and emotionally moving that doesn’t necessarily mean it is financially successful in a way that would get you a private jet. If a company is happy with their titles being an artistic success and even highly reviewed rather than financially successful then obviously private jets aren’t their priority. However if that company has based its entire portfolio around a single IP that has seen moderate success maybe outspokenness is needed.

Posted:A year ago

#19

Lewis Brown
Snr Sourcer/Recruiter

194 41 0.2
There is a place for independents just as there is a place for the big publishers I feel no need to attack either as right or wrong and wonder why this always occurs I love Battlefield just as much as Minecraft or Angry Birds. If he wants to vent then let him doesn't mean I agree, but hey we work in a diverse industry and there is nothing bad and everything good about that! :-)

Posted:A year ago

#20

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